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Indian aquaculture segment has become a growth engine for the agriculture sector and is postulated to be one of the key sources of food-protein supporting the growing Indian population in coming years. Elsewhere, scholars have demonstrated India’s overall macro-environmental factors being congenial (Pallapothu & Krause, 2013) and the overall market and sales potential as attractive (Pallapothu, 2013). However, in addition to the overall market attractiveness, estimating the competitive forces in an industry is vital to ensure profitability in a new business. As a continuum of previous work (Pallapothu, 2013), this research addresses the market and non-market forces that are currently shaping the Indian aquaculture segment.

Before entering any market, the investor group or the participating organization has to understand the competitive forces that exist within the industry of choice (aquaculture in this case) to gauge the profitability potential of a new business and to strategize its approach on the market positioning to protect its profit share. Michael Porter (1980) defined the industry structure and the competitive forces in interpreting the microeconomics of an industry for the benefit of management strategy development to position itself either by coping or influencing these competitive forces which has gained popularity and some criticism (Prasad, 2011). The framework demonstrated strengths of unraveling each of the market forces and their impact on capturing the company’s share of profit from the pool of industry stakeholders namely, buyers, sellers, new entrants, competitors, and substitute manufacturers (Porter, 2008).

This study not only contributes to the understanding of the Indian aquaculture market but also quantifies each of the competitive forces with consideration of influences from non-market forces such as culture and history of India to further the profit potential of a new fish vaccines business in India. The article is organized as follows. The second section provides an overview of the literature review on market and non-market forces, and the strategic positioning. In section three, a suitable methodology, study framework, and the data sources used in the study will be outlined. The analyses of the key forces and their impact on the profit potential of the entrant in Indian aquaculture industry will be executed, and described in section four. Comparisons are made to similar industries in Chile and Norway, as these two countries are the leaders in Salmonid aquaculture production. Suggestions on how to position the entrant in this industry will be offered taking into consideration the findings from this research and drawing from the ideas available in the extant literature in section five. Finally, conclusions of the research and the direction for future exploration are summarized in section six.

2. Literature Review

Michael Porter (1980) first described the ‘five competitive forces’ as threats posed by the competitors, the buyers, the suppliers, the new entrants, and the substitute makers that not only shape the industry structure and establish rules of competition but enable a company to realize the profit potential in a given industry. Later, Brandenburger and Nalebuff (1995) introduced the ‘complementors’ as the sixth force by using game theory on how interfirm dependencies among counterparts of substitutors could change the game of business by forming strategic alliances. This dependency was further exemplified by Intel’s former Chairman, Andrew Grove (1996) who defined complementors as the ones who share similar business interests and their products offer synergistic properties.

Hax and Wilde (2001) proposed the Delta Model using network theory on profitability and suggested that the firm in question has to focus on its customers’, suppliers’, and complementors’ industry rather than its own to pursue strategy. They argued that complementors are the key players in competitor lock-out and system lock-in based on the resource-based view of the firm, and postulated that a firm’s profits rely on the resources and capabilities that a company is able to appropriate. An understanding of the industry structure and the underlying major forces that limit the firm’s profitability is therefore vital in forecasting a firm’s earning capability and to derive a strategy to defend or influence its position (Porter, 1980).

New ventures, at their inception, face an immediate crossroads. They must select a form from a wide range of organizational design alternatives that not only allow them to achieve their goals but also allow them to access or acquire valuable and necessary resources from the external environment. Thus, the selection of the organization’s form is critical in order to garner legitimacy and sustain viability. Any structure selected may either constrain or strengthen a new venture’s ability to access and exploit such resources (Scott, 1987; Selznick, 1949). Institutional theory and, in particular, its legitimization construct may provide insight into how new ventures select one organizational form over another. Thus, two important questions must be answered: How do new ventures select their organizational forms in an effort to maximize access to life sustaining resources, and, for those new ventures blazing entirely new market paths, how does their nascent, constructed structure evoke an acceptance of legitimacy from the broader, traditional market? New ventures do not just appear; rather they are formed to exploit opportunities, whether it is a discovered opportunity or the creation of an opportunity, entrepreneurs seek to exploit competitive imperfections in the market (Alvarez and Barney, 2007). Yet new ventures in their formal structure as a firm often start long before they are officially incorporated, and indeed many of the interesting internal processes that result in an established organizational form occur before incorporation. The formation and exploitation of opportunities thus leads to the formation of organizations that are created by the entrepreneur to take advantage of the perceived opportunity. Using opportunity formation as our starting point, we attempt to offer insight into when do new ventures need forms that follow the current institutional form’s rules, governance, and structures and when do these new ventures need forms that are not imbedded in current institutions. Entrepreneurs creating new ventures rarely are able to see “the end from the beginning” (Alvarez and Barney, 2007: 15). The process of creating a new venture is enacted in an iterative process of action and reaction (Berger and Luckmann, 1967; Weick, 1979); thus, there is no end until the new venture creation has occurred. This enactment of anew venture, with the end not known at the beginning, may result in a traditional (or standard) organizational structure to exploit the opportunity.

Yet, some of these new ventures also may result in new forms—new structures that even disrupt or change established institutions as they seek to exploit the opportunity. The research question we seek to explore is how institutional theory might provide insight into the organizational structure selected by new venture firms, and also how the new organizational form obtains legitimacy for that structure and thus changes acceptable institutional norms. Below we examine how institutional forces may influence the organizational structure of new ventures in both established and new fields. Our discussion will begin with a review of institutional theory literature; how the concept of organizational structure has developed and is used in this paper; and, a definition of our use of emerging field. From that point we will discuss how institutional theory may provide an explanation of the organizational structures available to new venture firms entering into established business fields. Following the assessment of new ventures in established fields, we use institutional theory to better understand the process by which new ventures may establish an organizational structure where no institutionalized (legitimated) structure currently exists.

A body of influential research has suggested that there is a positive association between trade openness and government size. Cameron (1978), one of the first to establish econometric evidence on the topic, noted that trade openness in 1960 was a strong predictor of the increase in government tax revenues between 1960 and 1975. He pointed out that more open countries tend to be more unionised, with collective bargaining leading to greater demand for social protection accommodated by increasing tax revenues. This pioneering version of the compensation hypothesis – by which more open countries tend to have bigger public sectors – was reappraised and further articulated by Rodrik (1998). While challenging the collective bargaining explanation, Rodrik argued that government spending might serve as an indirect insurance against external (and undiversified) risk. His most influential result was to find a positive association between government consumption and trade integration in a large sample of countries that qualifies openness both as a determinant and as a predictor of government consumption levels across countries (Rodrik, 1998; 1004). (Note 1) This conclusion would suggest a strong complementarity between markets and governments, with a more powerful role for government consumption in those economies that are subject to larger external risks.

In an influential work, Alesina and Wacziarg (1998) (henceforth AW) have challenged the Rodrik’s hypothesis, by arguing that the positive relation between openness and government size could be mediated by country size. The first reason is that country size is negatively correlated to government size, as the costs of certain (non-rival) public goods grow less than proportionally to the size of population. This is typical, for example, of infrastructures, roads, libraries (at least up to the congestion limit) and implies that the per capita cost of public goods declines in larger countries. The second reason is that country size is also negatively correlated to trade openness, as small countries have less opportunity for autarky. As argued by AW (p. 306), these two facts taken together imply that more open countries may have bigger governments.

This has cast some doubts on the existence of a Rodrik-type direct link between openness and government size. Consistently with the two hypotheses, AW – by running OLS on 1980-84 averages for the same set of countries used by Rodrik (1998) – actually find a negative relation between government consumption and population (taken as a proxy of country size) and a negative relation between trade openness and population. In both cases, the log of population exhibits a highly significant negative coefficient, and the result appears robust not only to a parsimonious specification of explanatory variables, but also to an extension of the basic model to control for possibly omitted variables.

Then, in order to capture the impact of country size on the co-variation between government consumption and trade openness, the authors move to the estimation of the basic Rodrik’s specification, where country size is not included among the explanatory variables (as in Table 1 in Rodrik, 1998) and replicate the Rodrik’s result of a positive association between government consumption and trade openness. By omitting trade openness and including country size the negative relation between country size and population is also confirmed. When including both (trade openness and country size), the positive impact of trade openness persists, that confirms the Rodrik’s result. However, AW impute this persistence to the high degree of collinearity between openness and country size. Thus, they experiment a version of the regression where variables calculated as ratios are included in levels and not in logs. In this case, the positive relation between openness and government consumption disappears, showing that the original Rodrik’s result might be driven by the omission of country size. (Note 2)

More recently, Ram (2009) (henceforth R) has challenged the outcome of AW mainly on the econometric ground. Considering 154 countries for the period 1960-2000, R shows that while pooled OLS regressions replicate the results of AW, a fixed effect estimation that takes into account cross-country heterogeneity would not lead to a significant negative co-variation of country size and either trade openness or government size (p. 213). Thus, the estimates by R would be consistent with a direct link between openness and government size along the lines suggested by Rodrik (1998), instead of being mediated by country size as argued by AW. In R, the compensation hypothesis would indeed be supported by the positive sign of trade in all specifications.

This paper sheds additional light on these issues. In particular, it will compare the results by AW and R with those obtained by an updated panel analysis in the period 1962-2009, with data taken from the Penn World Tables 7.0 (PWT) and from the World Development Indicators (WDI). We show that the sign of the relationship between government size and economic openness is not necessarily driven by country size. More importantly, the results obtained by fixed effects as in Ram (2009) show that the compensation hypothesis strictly depends on the inclusion of African countries, further weakening the general validity of the compensation hypothesis.

New ventures, at their inception, face an immediate crossroads. They must select a form from a wide range of organizational design alternatives that not only allow them to achieve their goals but also allow them to access or acquire valuable and necessary resources from the external environment. Thus, the selection of the organization’s form is critical in order to garner legitimacy and sustain viability. Any structure selected may either constrain or strengthen a new venture’s ability to access and exploit such resources (Scott, 1987; Selznick, 1949). Institutional theory and, in particular, its legitimization construct may provide insight into how new ventures select one organizational form over another. Thus, two important questions must be answered: How do new ventures select their organizational forms in an effort to maximize access to life sustaining resources, and, for those new ventures blazing entirely new market paths, how does their nascent, constructed structure evoke an acceptance of legitimacy from the broader, traditional market?

New ventures do not just appear; rather they are formed to exploit opportunities, whether it is a discovered opportunity or the creation of an opportunity, entrepreneurs seek to exploit competitive imperfections in the market (Alvarez and Barney, 2007). Yet new ventures in their formal structure as a firm often start long before they are officially incorporated, and indeed many of the interesting internal processes that result in an established organizational form occur before incorporation. The formation and exploitation of opportunities thus leads to the formation of organizations that are created by the entrepreneur to take advantage of the perceived opportunity. Using opportunity formation as our starting point, we attempt to offer insight into when do new ventures need forms that follow the current institutional form’s rules, governance, and structures and when do these new ventures need forms that are not imbedded in current institutions.

Entrepreneurs creating new ventures rarely are able to see “the end from the beginning” (Alvarez and Barney, 2007: 15). The process of creating a new venture is enacted in an iterative process of action and reaction (Berger and Luckmann, 1967; Weick, 1979); thus, there is no end until the new venture creation has occurred. This enactment of a new venture, with the end not known at the beginning, may result in a traditional (or standard) organizational structure to exploit the opportunity. Yet, some of these new ventures also may result in new forms—new structures that even disrupt or change established institutions as they seek to exploit the opportunity.

The research question we seek to explore is how institutional theory might provide insight into the organizational structure selected by new venture firms, and also how the new organizational form obtains legitimacy for that structure and thus changes acceptable institutional norms. Below we examine how institutional forces may influence the organizational structure of new ventures in both established and new fields. Our discussion will begin with a review of institutional theory literature; how the concept of organizational structure has developed and is used in this paper; and, a definition of our use of emerging field. From that point we will discuss how institutional theory may provide an explanation of the organizational structures available to new venture firms entering into established business fields. Following the assessment of new ventures in established fields, we use institutional theory to better understand the process by which new ventures may establish an organizational structure where no institutionalized (legitimated) structure currently exists.

Entrepreneurship and strategy research have developed independently of each other (until recently), yet both Academy’s have been concerned about certain common topics: the sources of innovation, organizational renewal, wealth creation, competitive advantage, growth, and flexibility (see Alvarez, 2003; Stevenson & Jarillo, 1990; Ireland et al., 2001). Both academic fields are heavily influenced by the writings of Schumpeter and some of his concepts have been popularized in the literature as strategic intent (Hamel & Prahalad, 1989), hypercompetition (D’Aveni, 1994), dynamic capabilities (Teece et al., 1997) and the knowledge-based view of the firm (Winter, 1987).

A variety of notions relative to the interface of these two fields have been advanced. One extreme asserts strategic management is “dominant” over entrepreneurship and that future endeavors should concentrate on ‘making the marriage work’ given strategy’s ‘takeover’ (Baker & Pollock, 2007). Meyer (2009) cautions against the ‘takeover’ and ‘integration’ wording prevalent among some strategic management scholars by referencing Judge Learned Hand in a 1941 case of alleged unfair labor practices (National Labor Relations Board vs. Federbrush Co. 121F 2d, 304):

“Words must be analyzed in terms of the context in which they appear, for . . . ‘[w]ords are not pebbles in alien juxtaposition; they have only a communal existence; and not only does the meaning of each interpenetrate the other, but all in their aggregate take their purport from the setting in which they are used, of which the relation between the speaker and the hearer is perhaps the most important part’”.

Another extreme posits the inverse, that strategic management is itself a ‘subset’ of entrepreneurship (Browne & Harms, 2003). Andriuscenka (2003) on the other hand, refers to strategic entrepreneurship as the ‘successor’ of strategic management. V enkataraman & Sarasvathy (2005) use a “courtship” metaphor to liken strategic management to ‘all balcony and no Romeo’, and entrepreneurship being ‘all Romeo and no balcony’ inferring that they are “two sides of the same coin”. Thus, to take either one away, Romeo or the balcony, the whole story would fall apart. Schindehutte & Morris (2009) introduce the notion of a “fertile middle space” with various continua that allow for movement from one theoretical viewpoint to another and argue that strategic entrepreneurship is not a new territory to be colonized by either discipline. The most common notion is that overlapping areas of research, or points of “intersection” exist across both disciplines and that wealth can be created through combining the core advantages of each.

This article uses the Scopus database to quantify the surge of interest in strategic entrepreneurship that has emerged from the two formerly separate management academies of strategic management and entrepreneurship. Despite the growing number of published articles that have been written, the empirical base is still very small with authors positing a wide array of conceptual frameworks and models applicable to both small and large firms. Within the context of large firms, strategic entrepreneurship seems similar to its empirically tested predecessor, corporate entrepreneurship. The article argues that strategic entrepreneurship is somewhat confusing within a large corporation context and is essentially entrepreneurial orientation enacted with strategic intent that can still be best termed as corporate entrepreneurship. The article observes that despite the confusing elements of strategic entrepreneurship it is nevertheless gathering sponsorship and interest characteristic of an admittance-seeking social movement.

In December 2007, the U.S. Securities and Exchange Commission (SEC) adopted Securities Act Release No. 8879, “Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with IFRS without Reconciliation to U.S. GAAP.” The SEC’s new rule applies to financial statements issued for fiscal years ending after November 15, 2007, and interim periods after the effective date. The ruling has significant implications for U.S. firms, U.S. capital markets, and accounting practitioners and researchers.

Prior to 2008, the SEC required foreign registrants to file a Form 20-F, analogous to a Form 10-K, within six months after the fiscal year-end. In a Form 20-F, foreign private issuers reconciled their earnings and stockholders’ equity measures to U.S. GAAP. The SEC’s main motivation for the requirement was to protect U.S. investors who may not be familiar with non-U.S. accounting practices (Siconolfi and Salwen, 1992). However, the reconciliation requirement also suggests that U.S. GAAP is not only superior to foreign accounting standards, but is also superior to standards issued by the International Accounting Standards Board (IASB). (Note 1)

In contrast, the new ruling indicates the SEC’s confidence that IFRS represents a single set of high-quality accounting standards and that financial reports prepared under IFRS are as informative and useful as those prepared under U.S. GAAP. However, it is noteworthy that the Financial Accounting Standards Committee (FASC) and the Financial Reporting Policy Committee (FRPC), both part of the American Accounting Association (AAA), reached dissimilar conclusions in recent studies of the value of 20-F reconciliations to investors. The FASC argues that “allowing foreign companies to use IFRS without costly reconciliations to U.S. GAAP is likely to make U.S. stock exchanges more competitive…” (AAA, 2008a), whereas the FRPC indicates that “the research on the U.S. GAAP-IFRS reconciliation suggests that material differences between IFRS and U.S. GAAP exist and that

information contained in the reconciliations is reflected in investment decisions made by U.S. investors” (AAA, 2008b). The FRPC concludes, after reviewing the academic literature, that it “does not support the SEC’s decision to eliminate the U.S. GAAP-IFRS reconciliation requirement for foreign-private issuers” (AAA, 2008b).

Users of foreign firms’ financial statements also disagree among themselves on the SEC’s decision to allow IFRS filers to remove the reconciliation to U.S. GAAP. The CFA Institute, which represents investment analysts and portfolio managers, states in its comment letter to the SEC that “to the extent accounting standards have not yet converged (or new differences develop), investment professionals rely on the reconciliation as an efficient and cost-effective way of bringing to their attention the material differences in accounting” (CFA Institute, 2007). The CFA Institute further argues that “we believe that it is premature to eliminate this requirement at this time” (CFA Institute, 2007). In contrast, Fitch Ratings, the third largest rating agency, argues that it “does not pay very much attention to US GAAP reconciliations in 20-F reports and does not consider that their elimination would have a substantial impact on [its] ability to conduct analysis” (Fitch Ratings, 2007).

This policy debate on whether IFRS reporting is comparable to U.S. GAAP is what motivates this study. The controversy is complex because the features of any financial reporting system affect the application of any set of accounting standards (Barth, Landsman, & Lang, 2008). Although the SEC ruling is intended as a step toward convergence of U.S. GAAP and IFRS, the decision to waive the U.S. GAAP reconciliation requirement and allow IFRS is controversial. Against this background and concern, this paper examines properties of accounting information for cross-listed foreign firms on the U.S. stock exchanges across two periods: the U.S. GAAP reconciliation period and the IFRS reporting period.

Our investigation starts by comparing accounting-quality metrics for foreign issuers that apply IFRS to those for a matched sample of foreign firms that do not in the IFRS reporting periods. The results indicate that foreign issuers applying IFRS demonstrate more earnings management and less timely recognition of losses than do foreign firms filing U.S. GAAP reconciliations in the IFRS reporting period. However, the results also show that IFRS firms exhibit a higher association of accounting amounts with share prices and returns. Differences in accounting quality between the two sets of firms in the U.S. GAAP reconciliation period do not account for the IFRS reporting-period differences. We also compare accounting-quality metrics for IFRS firms in the periods before and after the SEC waiver and examine whether the change in accounting quality for IFRS firms between the U.S. GAAP reconciliation and IFRS reporting periods is different from that for their counterparts. The results document that foreign firms filing U.S. GAAP reconciliations experience a greater improvement in accounting quality in terms of less earnings smoothing and more timely recognition of losses than do foreign issuers adopting IFRS between the U.S. GAAP reconciliation and IFRS reporting periods. Overall, the combined evidence suggests that for non-U.S. firms, applying IFRS does not enhance financial reporting comparability with firms filing U.S. GAAP reconciliations.

In the coming decades, humanity is expected to face several major challenges, including an increase in the world’s population, in particular in emerging countries (China, India), a further concentration of people in towns and cities, the ageing of the population in developed countries, and an increase in incomes and related changes in consumption habits. This will cause a growing demand for food, energy and health services, to be obtained at reasonable costs, in a context characterized by increased global competition and resource scarcity, at the same time without compromising the fight against climate change.

In such a context, innovation has been placed at the heart of the EU strategies as emphasized by the Europe 2020 strategy and by the Innovation Union flagship initiative (European Commission, 2010a, b). In this context, the concept of the bioeconomy (or bio-economy or bio-based economy) has been put forward as the guiding perspective concerning primary production based on the management of biological resources. The bioeconomy has been defined in a number of different ways in various policy documents issued in recent years (see e.g. Clever Consult BVBA, 2010; OECD 2009). The word bioeconomy itself has often been introduced in the economic disciplines, yet for rather different concepts. The EU communication “Innovating for Sustainable Growth: a Bioeconomy for Europe” and its accompanying working document (European Commission 2012a; b) qualify the Bioeconomy as encompassing “the production of renewable biological resources and their conversion into food, feed, bio-based products and bioenergy. It includes agriculture, forestry, fisheries, food and pulp and paper production, as well as parts of chemical, biotechnological and energy industries. Its sectors have a strong innovation potential due to their use of a wide range of sciences (life sciences, agronomy, ecology, food science and social sciences), enabling and industrial technologies (biotechnology, nanotechnology, information and communication technologies – ICT, and engineering), and local and tacit knowledge.” A narrower definition is used by the OECD (2009): “…the bioeconomy can be thought of as a world where biotechnology contributes to a significant share of economic output.” In projecting the future of biotechnology and the bioeconomy up to 2030, this study identifies three key elements characterizing this sector: a) an advanced knowledge of genes and complex cell processes; b) renewable biomass; c) integration of biotechnology applications across sectors.

The bioeconomy in the EU (using the EU definition) presently accounts for an annual turnover of 2046 billion euro (of which 965 from food and 381 from agriculture) and 21 505 thousand employees (of which 4400 thousand in the food industry and 12 000 thousand in agriculture) (Clever Consult BVBA, 2010).

The bioeconomy is believed to be able to play an important role in creating economic growth and providing responses to global challenges, hence contributing to a smarter, more sustainable and inclusive economy. However, the different scientific contributions with regard to the potential for the future development of the bioeconomy (Carlson, 2007, OECD, 2009; May, 2009; The Royal Academy of Engineering, 2009) show rather diversified estimates of development, in particular in relation to the many variables that can affect such development.

The OECD (2009) identifies 4 drivers for future development of the bioeconomy: 1) public support to biotechnological research and training of young researchers; 2) public regulation; 3) management of intellectual property; and 4) public acceptance of biotechnologies. Innovation in public policy is recognised to have a central role across such determinants due to the apparent inability of market mechanisms and the present policy framework to guarantee a suitable response to future needs. The BECOTEPS (2011) white paper emphasises that a “successful bioeconomy needs coherent and integrated policy direction”, with key areas including investment in research, encouraging innovation, strengthening entrepreneurship in the bioeconomy, providing a skilled workforce, guaranteeing an innovation-friendly regulatory framework which balances both risks and benefits, and a good two-way communication with the public embedded in R&D projects to ensure societal appreciation of research and innovation. The documents of the main European Technology Platforms highlight, in particular, the need for an increased understanding of the concerns of consumers and citizens, as well as initiatives aimed at improved communication. The recent communication about resource-efficient Europe encourages to consider the whole life cycle of the way resources are used, including the value chain, and the trade-offs between different priorities.

The need to improve manufacturing operations in the UK is without question. Global competition is intense and this has forced several UK manufacturing companies to transfer operations to low-cost economies. It is therefore imperative that the remaining manufacturing facilities continuously improve and become as efficient and effective as possible. The primary mechanism in business to steer such actions is strategy and this should be developed, implemented and linked across corporate, business and functional levels (Skinner, 1969, Pinjala et al., 2004). When manufacturing performance is considered, equipment maintenance has a key influence on safety, cost, customer service, and quality. Research by Robson (2010) found that maintenance organizations in the North East of England were not creating maintenance strategies and linking them to manufacturing and business goals. However, this may not be an issue unique to the UK because similar concerns were raised in Sweden by the research of Jonsson (1997).

It is not clear why managers choose not to create a maintenance strategy (Note 1) but it could be that they “do not know how”. The plethora of strategic models and frameworks certainly makes it difficult, because there is no clear pathway for practitioners to follow. This paper addresses the problem by firstly reviewing the literature in respect to strategy and from this, developing a pragmatic approach to the formulation and implementation of a maintenance strategy. The structure of the paper is as follows: Section 2 considers the benefits of creating a maintenance strategy and why it is important to do so; Section 3 presents a short review of the literature covering both corporate and maintenance strategy; Section 4 proffers a practical approach to developing a maintenance strategy; Section 5 explains how a maintenance strategy can be audited and finally; Sections 6 provides a set of conclusions.

Maintenance strategies are important because they can bring significant benefits to manufacturing organizations. The interdependence between manufacturing operations and equipment maintenance means that if a suitable maintenance strategy is deployed this should lead to improved machine reliability and availability. A maintenance strategy also ensures that scarce and expensive resources i.e. maintenance labor and materials are efficiently and effectively used. In the UK, most manufacturing companies expend between 4-6% of their annual turnover on maintenance (Willmott, 1994). The alternative to a maintenance strategy is poor and ineffective equipment maintenance, which will detrimentally affect all areas of manufacturing operations. Improving the reliability of machines also aligns well with the concepts of Lean Manufacturing, because reliable machines mean repeatable and predictable processes which in turn, reduce the waste due to overproduction and unplanned stoppages (Slack et al., 2007). The completion of customer orders in full and on time becomes more likely as product defects caused by equipment failures diminish. From a maintenance organizational perspective, a holistic maintenance strategy sets out a sustainable vision for the future with clear policies for equipment maintenance and staff. This covers a wide gamut of topics e.g. objectives, goals, appropriate machine maintenance tactics, performance measures, training, staff development, succession planning etc. The generation of a documented strategy with agreed plans, also promotes the reputation of the maintenance function within the plant hierarchy, raising its profile and strategic status. In this situation, the maintenance function is no longer a “necessary evil” but rather a function that is positively contributing to the business and measuring its performance and progress against agreed targets.

Rural regions, accounting for a large part at the European but also the global scale, are nowadays in front of great challenges as to their future sustainable development. Most of them are confronting problems of decline and out-migration, ageing of their population, a lower skill base and average labor productivity, etc. (Organisation for Economic Co-operation and Development [OECD], 2006), which are strongly affecting their future development perspectives. Moreover, they have to deal with new challenges emerging from the external environment, such as climate change, changing consumption patterns, technological developments, increasing urbanization patterns, etc.

In order to effectively cope with challenges of the internal and external environment, a society empowering, place-based, cross-sectoral approach for policy making needs to be adopted, pursuing the sustainable exploitation of available resources and human capital, as well as the better coordination and interaction among sectors, levels of government and public and private actors (Stratigea, 2011). Towards this end, planners are challenged to focus on the development of tools and approaches that will support policy makers in making knowledgeable decisions towards desirable futures that can be well adjusted to the peculiarities of each specific rural context. The focus of the planning efforts, in such a context, is not only on the policy results delivered, but also on the process through which these results are produced and the way tools used can structure thoughts and support an effective communication platform for interaction among local participants in a planning exercise. Such an effort implies the need for planning tools that can handle uncertainty and complexity and support a more pluralistic approach (Godet, 1994), capable of integrating information on local views, opinions, visions etc. in the decision making process.

Along these lines, the focus of the present paper is on the structuring of a participatory methodological framework, for planning the integrated future agricultural development of a specific Greek rural region, the region of Kastelli-Herakleion in Crete. This framework is based on the LIPSOR participatory analytical model, integrated with the Focus Groups and the Future Workshop participatory tools. The structure of the paper has as follows: Section 2 refers to the problem to be dealt with in the specific study region; in Section 3 the participatory methodological framework is discussed; in Section 4, the empirical results of the application of this framework in the region at hand are presented; and finally, in Section 5, some conclusions are drawn.

Suggestions of economic policy stand for the accurate estimation of the relationships among variables. Parameters of the estimated model indicate the effects of policies. If the parameters do not change with respect to policies, it may be suggested that the existing policies are valid in the long-term. This situation is known as Lucas critique in the literature. If the policy change is recognized at an unknown point and slowly in particular time period (as shown in Lucas critique), it may be inferred that the policies are not considered with structural change (Greene, 2002). This circumstance may damage the succes of explanatory power of the model and may cause the invalidity of the results, so the stability of model should be tested by convenient methods.

There were various studies regarding model stability in the literature. These studies stand for Lucas critique (1981), which argues that “the economic policies must change whenever the parameters of the model change”. The common suggestion of the studies refers to the neccessity of model stability against policy changes in order to use the model as an economy policy. Model stability can be tested by package programs with developing technology. In these programs, CUSUM and CUSUMQ packages are generally used.

This study considers specific model stability tests that can be used when the policy change is slowly recognized in a time period at an unknown point. There are certain weaknesses of frequently used CUSUM and CUSUMQ model consistency tests statistically (Andrew, 1993; Yashchin, 1993; Turner, 2010). MOSUM test, which was constructed based on the cumulative sums of the recursive resudials as CUSUM test, enables more robust estimation than COSUM test and therefore gives more information about the model (Chu et al., 1995, Zeileis et al., 2002). For these reasons, the results of two tests were involved in the study.

The paper is organized as follows. Section 2 involves the studies in the literature associated with model stability tests, Section 3 consists of econometric methodology and model form about time series analysis, furthermore after the variables used in the study are introduced, the results of unit root, cointegration, CUSUM and MOSUM tests being obtained by using Eviews-6 and R-2.14.2 package programs are interpreted respectively. Section 4 concludes the study.